There are always two sides when looking at any decision you will make- pros and cons. Today we will be analyzing the good and the bad of leasing a car so we can help you make a decision for your next big purchase. There are many immediate payoffs to leasing a car, but in the long-run you might realize that it isn’t a right fit for you. You will soon find there are actually more cons to leasing than pros to leasing. If you are able to afford the luxury of switching out your car every two-three years, then go for it and lease your next car. If not, continue reading so we can weigh in on your decision on leasing a car.
Pros of Leasing a Car
The immediate benefits of leasing a car is having the luxury of not committing to one car for a long period of time. You can change your car every two to three years and keep updating to stay on top of trends. Another attractive feature of leasing is having a lower monthly payment to keep up with for a couple years. When you commit to purchasing a car instead of leasing, you pay higher monthly fees for a long period of time and end up paying more than what the car is worth by the end of completing all the payments. If you do end up liking the car you are currently leasing and would like to commit, you also always have the option to change your contract to “lease-to-buy”. You can have the first three years with a lower monthly payment and then complete the payments to own the car. The money you put towards the first three years would not go to waste, and if you decide not to buy after the three years of leasing, you can return it.
Cons of Leasing a Car
Now let’s get into the negative side of leasing a car, which is way more than the positive to consider. After falling for the immediate attractions of leasing, you discover that there are many hidden details and costs in the contract for a new lease car. Dealers pull you in with a lower cost but in order to get it you must have a very high credit score. You can still lease with a bad credit score, but it will end up with a higher monthly payment. Rather than putting the monthly payments towards one day owning the car, you are paying monthly to just drive it. If you can afford paying from $100-150 more, you can one day own a car rather than always paying monthly for essentially nothing.
Once your lease contract is over, you will not end up getting any cash back like you usually do if you own the car. When you return the leased car it is as if you never had it and you move on to the next and keep paying towards no end. If you buy a car and decide you don’t want it anymore, you can at least sell it and get a partial to full amount back.
There are also the limitations and restrictions that come with leasing a car that are kind of similar to renting a house. You can not customize your lease car like you would like because you will eventually have to return it to the dealership. Even though you can change up your car every three years, you cannot customize the car you are driving because the lease agreement states that you must return the car exactly how you got it from the dealer. That means no tinting, no cool rims, fancy wheels, color enhancements, or audio modification. If the leased car is returned looking differently or has any damage, there also is another extra charge to bring it back to original form.
The biggest con and restriction is the amount of miles you can travel with a lease car. The lease contract has a set amount of miles you can drive by the end of the lease and upon returning the vehicle, if you go over the set amount- there is a fee to be paid. Depending on the car and dealer this varies, but if you go over the amount of mileage given you are charged extra. The total mileage is calculated as the number of years leased multiplied by the annual miles allowed. The extra cost is between 15-30 cents per mile, accumulating up to five dollars a day. When you buy, you have unlimited mileage and freedom to drive wherever you want, but with a lease you must calculate and take in consideration every trip you take.
Leasing a car may be an easy solution to the situation of needing a car immediately, but you must always look at the pros and cons. Depending on what is more important to you and your preference you can make a decision on the provided information. In the end depending on your status and preference the decision is yours. We know how important choosing a car is and this step is no small one. Happy shopping and we hope you can make a comfortable and confident decision!